Plaintiffs Giny and Gwen are Denied Injunction Pending Summary Trial Appeal

 

Cross posted at ADCSovereignty

Here is the actual Order for denying the injunction:

ORDER

Our commentary will follow but here are the reasons provided by the Court for denying the injunction request:

REASONS FOR ORDER

RENNIE J.A.
[1] On September 15, 2015 the Federal Court dismissed, in part, the appellants’ action for declaratory and injunctive relief with respect to intention of the Minister to disclose certain financial information to the Internal Revenue Service of the United States of America. The summary trial decision of Justice Martineau addressed only that part of the action dealing with what might be characterized as the statutory interpretation and statutory authority of the Minister to make the disclosure. Charter challenges to the proposed action were, on consent, not addressed and await trial. Thus, the summary judgment dealt exclusively with the allegation that the disclosure was contrary to the Canada–United States Tax Convention Act, 1984 (S.C. 1984, c. 20), the Canada-US Tax Treaty and Income Tax Act (R.S.C., 1985, c. 1 (5th Supp.)), collectively described as the authorizing legislation.

[2] The appellants move on an urgent basis for an interlocutory injunction, effectively staying the disclosure of their financial information by the Canada Revenue Agency (CRA) to the Internal Revenue Service (IRS) under the authority of this legislation. The Minister has made clear that she intends to disclose this information at the close of business today, hours from now.

[3] By way of background, and at the highest level of generality, the legislation mandates the disclosure of information about “US persons” held by Canadian banks to the CRA, and provides for the CRA to automatically disclose that information to the IRS on an annual basis. The IRS may or may not use that information to pursue enforcement actions against US persons resident in Canada.

[4] The appellants are “US persons” by virtue of birth, but have spent their working lives in Canada and are Canadian citizens. They do not hold US passports. They claim to be “accidental Americans”, US citizens only by reason of birth. Their information would be disclosed under the regime, which could lead to the IRS enforcement action. The judgment below is candid that the application of the law could cause the appellants serious difficulties.

[5] The appellants argue, amongst several other grounds, that the disclosure of this information constitutes assistance to the United States in its enforcement and collection of its taxes, which is prohibited under Article XXVI A of the Canada-US Tax Treaty. The Federal Court found that this prohibition only applies once tax liability has been determined and is enforceable, and is thus not triggered, and that in any event, any such claim was premature.

[6] The appellants further argued that information sharing was only permissible when that information “may be relevant” to enforcing the treaty or domestic laws of a contracting state (Article XXVII), and as such the information must be assessed for relevance on a case-by-case basis rather than handed over in bulk. The judge below found that, even when the information is still in bulk form and has not been shown to have any further utility, it already meets the “may be relevant” test. The appellants argue, in support of the interlocutory injunction, that the learned judge’s reasons fail to respond to this argument; the judge erred in focussing on the fact that Canada cannot challenge US tax policy choices, but failed to explain how that establishes or meets the statutory requirement of relevance.

[7] The appellants also argue that the regime violates the non-discrimination provision of Article XXV, wherein a US National resident in Canada cannot be subject to a burden that is not also imposed on Canadians in Canada. The appellants argue that the privacy intrusion, and the burden of complying with the filing requirements, are thus unequally imposed on them as US Nationals resident in Canada. The judge rejected this argument. While he did not directly address the privacy interest, he said that the filing costs are borne by the banks rather than the individuals and thus cannot ground unequal treatment.

I. The test for an interlocutory injunction

[8] I am not satisfied that each of the three criteria governing the grant of an injunction or stay pending appeal set forth in RJR — MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, 1994 have been met.

[9] The appellants assert four serious questions to be addressed on appeal. At this stage the Court only needs to examine the questions and be satisfied that they “may” form the foundation of a meritorious appeal. In addition to the grounds reviewed above, the appellants argue that the automatic disclosure of taxpayer information of Canadian residents who are also US citizens, is not authorized by the Canada –US Tax Treaty. While Martineau J rejected this argument, and the subsidiary arguments which underlie it, the question at this stage is only whether the appellants might have a credible case to make an appeal. I am satisfied that they do.

[10] I am not, however, satisfied that the criteria of irreparable harm has been met. The Minister concedes, on two occasions in her memoranda, that “there is no taxpayer information concerning the Appellants in the batch of ‘slips’ that have been collected by the Minister from financial institutions pursuant to Par XVIII of the Income Tax Act and which the Minister must disclose to the United States, pursuant to the IGA, on or before September 30, 2015.”

[11] On this understanding, the appellants do not meet the second criteria of the RJR — MacDonald test. As no financial information concerning the appellants will be sent to the IRS, there can be no irreparable harm.

[12] Turning the third criteria, the balance of convenience, the Minister concedes that the appeal will not be moot as of this transfer of information this afternoon. The Minister concedes the existence of a continuing live controversy. While mootness is always an question for the panel of this Court hearing the appeal, at this stage, the Minister’s position that the appeal will not be moot tips the balance of convenience in favour of the Minister.

“Donald J. Rennie”
J.A.

CANADIAN FATCA IGA LITIGATION: We need IRS NON-COMPLIANT Canadian Witnesses with FATCA REPORTABLE ACCOUNTS > $US 50,000

WE NEED MORE WITNESSES WILLING TO FILE AFFIDAVITS IN OUR CANADIAN FATCA IGA LAWSUIT:

U.S.-born Canadian citizens, your bank knows that you were born in the U.S. because you provided this information, never IRS compliant, no meaningful history with U.S. except by birth in U.S., never U.S voting, never U.S. passport, never relinquished, but you must have a FATCA reportable account >U.S.$ 50,000

Reportable accounts can be, for example, non-registered investment accounts — but CANNOT be RRSP, RESP, RDSP, TFSA etc. registered accounts. We also seek witnesses who have accounts less than $50,000 U.S. but who know or suspect e.g. from a bank FATCA letter that their account info has inappropriately been turned over to CRA/IRS. You will describe your harm in a written affidavit which will be made public. If interested contact stephen.kish.chair@adcs-adsc.ca See our website at www.adcs-adsc-ca

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Letter to Minister of Revenue Regarding IRS Delay in Account Reporting

 

cross-posted from the ADCSovereignty Blog
 

ADCS_ReqMinFind_b_SEP_21_2015 (1)

Eng_Fr_logo
In our September 18 ADCS blog post we advised you that, for whatever reason, the United States Department of Treasury will now permit a one year extension, to September 30, 2016, to turn over private bank account information to the U.S. Internal Revenue Service, to comply with the U.S. FATCA law. However, the affected country HAS TO ASK FOR THE EXTENSION.

On September 18 we said on the blog:

“Well, it’s been quite a week. At approximately 4:45 p.m. today the IRS issued a notice confirming that the FATCA implementation date will be extended to September 30, 2016. As you know Canada has a Model 1 IGA. Assuming the correctness of the post in the above tweet:

Model 1 IGA Jurisdictions for Which the Obligation to Exchange Is In Effect — For those Model 1 IGA jurisdictions where the obligation to exchange is in effect now, Notice 2015-66 provides that FFIs in that country will be treated as FATCA compliant, and not subject to withholding, so long as the partner jurisdiction notifies the U.S. before September 30 that it requires more time, and “provides assurance that the jurisdiction is making good faith efforts to exchange the information as soon as possible.” Notice 2015-66 does not, however, change the deadline for FFIs to report information to their local tax authority, which remains governed by law of that country.”

We therefore instructed our legal counsel to notify the Government of Canada (and they have) of this development and request that the Government of Canada NOT disclose your banking information to the IRS.

— Today, September 21, we posted a new ADCS blog in which we specifically asked Canada’s Minister of National Revenue, Kerry-Lynne Findlay, a defendant in our lawsuit, to apply for the extension before September 23, the date the private account information is due to be sent to the U.S. IRS.

We said:

September 21, 2015

The Honorable Kerry-Lynne Findlay,
Minister of National Revenue
House of Commons

Dear Minister Findlay,

We have an urgent time-sensitive request regarding our litigation in which you are a defendant, which we believe will be helpful to both plaintiffs and Government defendants, but which needs to be acted on no later than by end of business day September 22, 2015.

We are the chair and co-chair (and legal counsel) of the Alliance for the Defence of Canadian Sovereignty. We are the non-profit organization which is prosecuting the FATCA lawsuit against the Government of Canada. The lawsuit is “live”, “well” and expected to move to full trial in 2016. We are at: http://www.adcs.adsc.ca.

By way of background:

1. On February 5, 2014 the Government of Canada entered into a “Model 1” IGA agreement concerning the imposition of the U.S. FATCA (“Foreign Account Tax Compliance Act”) law in Canada.

2. On June 19, 2014 the Government of Canada enacted the FATCA enabling legislation through Bill C-31.

3. On July 1, 2014 FATCA became the law of Canada. The IGA required that Canada (via the CRA) report the banking information of those defined by the U.S. to be U.S. Persons to the IRS

4. The FATCA IGA required that the information be reported no later than September 30, 2015.

5. The Government of Canada has indicated to our legal counsel that it intends to report the banking information of those identified as “U.S. persons” to the IRS on September 23, 2015.

On the afternoon of Friday, September 18, the U.S. Internal Revenue Service issued Notice 2015-66, pursuant to which the deadline for the turnover of FATCA data (for countries with a Model 1 IGA agreement) has been extended for one year. Countries with a Model 1 IGA (including Canada) are no longer required to report to the IRS by September 30, 2015. It is required that Model 1 countries request this extension from the IRS.

See:

https://adcsovereignty.wordpress.com/2015/09/18/irs-extends-fatca-compliance-date-for-one-year-to-september-30-2016/

http://www.irs.gov/pub/irs-drop/n-15-66.pdf

REQUEST:
In light of the large number of Canadian citizens potentially affected AND in view of the fact that the Government of Canada and the Minister of National Revenue are defendants in the Deegan and Hillis lawsuit AND in view of the fact that the Government is NO longer required to transfer the FATCA data to the IRS we request:

That the Government of Canada apply for the extension, no later than by end of business day September 22, to NOT transfer the data with a view to meeting a September 30, 2015 deadline that is NO longer required.

Clearly, the Government of Canada, irrespective of its FATCA obligations to the United States, has the opportunity to not transfer the private banking information of innocent Canadian citizens to the United States Internal Revenue Service.

Your action in requesting the permitted delay in the transfer would be significant for both plaintiffs and defendants as we move down the litigation road.

Should you need more information I ask that you contact Mr. John Richardson our legal counsel and co-chair.

Sincerely,

Dr. Stephen Kish, Chair, Alliance for the Defence of Canadian Sovereignty
John Richardson, Co-Chair and Legal Counsel

cc:
Andrew Treusch, CRA
John Ossowski, CRA
Kevin Shoom
The Honourable Joseph Oliver

The #StopFatca Press Release and Social Media Page

cross posted from the ADCSovereignty WordPress Blog

stop fatca

ADCS PR pdf file: ADCS PR 19SEP15c pdf

ADCS PR png file: ADCS PR 19SEP15 png

 
I am working on this post as I post it and it will be constantly updated. Please act ASAP!

We want to get this blasted all over the world in the next 3 days. Every US Person abroad needs to put the same pressure on their own governments TO STOP THESE TRANSFERS FROM TAKING PLACE as all Model 1 IGA’s require turnover of information by September 30. Each government has TO ACTUALLY REQUEST THIS EXTENSION FROM THE IRS, so members need to take responsibility for making sure their respective tax authority/government does so. A widget on this post will show any tweets using the hashtag #StopFatca so all can see which countries the message is being spread from.

For Twitter:

Please use this hashtag: #StopFatca.

Please use RT on every Tweet

You can use this shortened link in order to get more info, hastags, etc into the tweet: http://bit.ly/1WaBY1i

Please,if you already have followers who are not expats but may be sympathetic, share other political issues, please send them the tweet directly with the RT; don’t assume they will see it in their feed just because they follow you. Creating a network with other users is important in order to utilyze social media to the max.

Sample Tweets to individuals; Notice you can simply copy/paste these (the plain text just below this paragraph and directly above the picture of the tweet) directly:

CDN govt 2 turn over 1million+ of ur fellow CDNs 2 IRS
Let them know u won’t tolerate this #StopFatca RT http://bit.ly/1WaBY1i

//platform.twitter.com/widgets.js
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IRS extends FATCA Compliance Date for one year to September 30, 2016

 

cross posted from the ADCSovereignty Blog

https://twitter.com/ExpatriationLaw/status/645030268462628865

Well, it’s been quite a week. At approximately 4:45 p.m. today the IRS issued a notice confirming that the FATCA implementation date will be extended to September 30, 2016. As you know Canada has a Model 1 IGA. Assuming the correctness of the post in the above tweet:

Model 1 IGA Jurisdictions for Which the Obligation to Exchange Is In Effect

For those Model 1 IGA jurisdictions where the obligation to exchange is in effect now, Notice 2015-66 provides that FFIs in that country will be treated as FATCA compliant, and not subject to withholding, so long as the partner jurisdiction notifies the U.S. before September 30 that it requires more time, and “provides assurance that the jurisdiction is making good faith efforts to exchange the information as soon as possible.” Notice 2015-66 does not, however, change the deadline for FFIs to report information to their local tax authority, which remains governed by law of that country.

We have instructed our legal counsel to notify the Government of Canada (and they have) of this development and request that the Government of Canada NOT disclose your banking information to the IRS.

It’s been quite a week. We will keep you posted.

 

John Richardson